Howdy all,
So much great energy and information around the Mustache movement. Many of the philosophies and lifestyle traits are ones I share. Problem is I have been slow to actually make some of the important moves towards financial freedom and a stress-free life. Wish I was smarter in my 20s, but that milk has been spilled. Mostly from reading the MMM blog, I've picked up some great advice on getting the money working for me and my wife to get on the road to controlling our own destiny, and living the life we want. We are not big spenders and lead a pretty modest life. But it would be great to work towards better financial freedom and all the goodness that brings.
Here's where we are:
I"m 47, wife is 44. She works a good job pulling just over 70K/year. I'm currently unemployed but have good near future potential for adding maybe 25K/year to the household income.
Our savings situation is not ideal. Roth IRA (Franklin Mutual Shares Fund), 13K. Bank accounts (dividend checking and a savings account), total 22K. She has a 401k, only been at current job for 2 years. Not sure what's in there now, but will be getting that info soon.
We have a mortgage, 1680/mo (270K outstanding balance on 300K purchase, 30-year)
Here's what I'm thinking:
- We max the 401k
- Keep the Roth IRA and try to put as much as we can into it
- Invest 10-15K from bank savings account in Vanguard Index fund, like VTSAX. We would then buy shares each year worth between 15-20K, basically the income I add.
- Trim some fat off our expenses, tighten the belt a little and try to put 10-15K/year into this
Since we don't have much savings, I'm not sure if we should sell the house and rent for a while until we build a bigger cushion. I feel like the proceeds we can get from a home sale, and it would sell pretty easily where we are, would be working better for us in the index fund.
Any and all comments and advice are welcome. How does my outline look as a starting point? I know there is a lot of talk about retiring early among this group, but my situation may be helpful to others my age who are facing the financial future and waking up to the fact that they haven't saved enough. There may be a better way than what I propose. If so, I'd love to hear about it.
Thanks much.
Zach